Marketing Mix » Product Life Cycle

What you'll learn this session

Study time: 30 minutes

The definition and importance of the Product Life Cycle
The four main stages of the Product Life Cycle
How to identify each stage using sales and profit patterns
Marketing strategies for each stage of the cycle
How businesses can extend their products' life cycles
Real-world examples of products at different life cycle stages

Introduction to the Product Life Cycle

Just like humans, products have a life cycle too! The Product Life Cycle (PLC) is a key concept in marketing that helps businesses understand how their products perform over time. It describes the journey a product takes from when it first enters the market until it's eventually removed.

Key Definitions:

Product Life Cycle: The stages a product goes through from introduction to eventual decline in the marketplace.
Extension strategies: Methods used by businesses to lengthen the profitable stages of a product's life.
Market share: The percentage of total sales in a market captured by a particular product or company.

Why the PLC Matters – Real Business Impact

Understanding where your product sits in its life cycle helps businesses make crucial decisions about:

How much to spend on promotion
When to adjust pricing
When to update product features
When to develop new products
When to withdraw products from the market

For example, Apple regularly refreshes its iPhone line before sales decline too much, keeping the product in the maturity phase for longer.

The Four Stages of the Product Life Cycle

Every product typically passes through four main stages during its lifetime in the market. Each stage presents different challenges and opportunities for marketers.

📈 Introduction Stage

This is when a product first enters the market. Sales start slowly as consumers become aware of the product.

Characteristics:

Low sales volume
High costs per customer
Limited distribution
Negative profits (losses) due to high development and marketing costs
Few competitors

Marketing focus: Creating product awareness and encouraging trial.

📉 Growth Stage

If the product succeeds in the introduction stage, it enters a period of rapid growth as more customers discover it.

Characteristics:

Rapidly increasing sales
Profits begin to rise
Wider distribution
Increasing competition as other businesses notice success
Production costs fall due to economies of scale

Marketing focus: Building brand preference and increasing market share.

📊 Maturity Stage

The product has reached widespread acceptance and sales growth slows down.

Characteristics:

Sales reach their peak
Profits are at their highest then begin to stabilise or decline
Intense competition
Price competition becomes more important
Market saturation (most potential customers already have the product)

Marketing focus: Defending market share while maximising profit.

📅 Decline Stage

Eventually, sales begin to fall as the product becomes outdated or consumer preferences change.

Characteristics:

Falling sales
Declining profits
Reduced marketing expenditure
Some competitors leave the market
Possible price cuts to clear stock

Marketing focus: Reducing costs or revitalising the product.

Identifying the PLC Stage from Sales and Profit Patterns

One of the most useful aspects of the Product Life Cycle is that you can identify which stage a product is in by looking at its sales and profit patterns:

📈 Introduction

Sales: Low and growing slowly

Profits: Negative (losses)

Example: Electric cars in early 2010s

📉 Growth

Sales: Rapidly increasing

Profits: Starting to rise

Example: Smartphones in 2010-2015

📊 Maturity

Sales: Peaked, stable or slow growth

Profits: Peak then start to fall

Example: Televisions today

📅 Decline

Sales: Falling consistently

Profits: Declining significantly

Example: DVD players

📇 Extension

Sales: Renewed growth or stabilisation

Profits: Maintained or improved

Example: Levi's jeans after rebranding

🚫 Deletion

Sales: Minimal

Profits: Often negative

Example: VHS tapes

Marketing Mix Strategies for Each Stage

The marketing mix (4Ps: Product, Price, Place, Promotion) needs to be adjusted at each stage of the product life cycle:

Introduction Stage Strategies

Product: Focus on core features, may have technical issues to resolve
Price: Either premium pricing (skimming) to recover development costs or penetration pricing to gain market share quickly
Place: Limited distribution through selected channels
Promotion: Heavy spending on advertising and PR to create awareness

Growth Stage Strategies

Product: Improve quality, add features based on early customer feedback
Price: Maintain premium pricing or begin to lower prices as competition increases
Place: Expand distribution channels to reach more customers
Promotion: Focus on brand differentiation and building loyalty

Maturity Stage Strategies

Product: Differentiate through variations, improve features, focus on quality
Price: Competitive pricing, possible discounts or promotions
Place: Intensive distribution, maximise availability
Promotion: Emphasise brand differences, loyalty schemes, sales promotions

Decline Stage Strategies

Product: Simplify range, remove unprofitable variations
Price: Either maintain price for loyal customers or reduce to clear stock
Place: Reduce distribution to profitable channels only
Promotion: Reduce spending, focus on loyal customer base

Case Study: Coca-Cola

Coca-Cola has maintained its product in the maturity stage for decades through clever marketing strategies:

Product extensions: Diet Coke, Coke Zero, Cherry Coke, Vanilla Coke
Packaging innovations: Different bottle sizes, cans, multi-packs
Seasonal campaigns: Christmas trucks, personalised bottles ("Share a Coke with...")
New markets: Continuous global expansion into developing countries

These strategies have helped Coca-Cola avoid the decline stage despite being over 130 years old!

Extension Strategies

Smart businesses try to extend the profitable stages of their products' life cycles. Here are the main strategies they use:

💡 Product Modification

Changing the product's features, quality, or appearance.

Example: Apple adding new features to each iPhone model

🏢 Market Modification

Finding new users or uses for the product.

Example: WD-40 promoting its many different household uses

💳 Marketing Mix Modification

Changing price, distribution, or promotion strategies.

Example: Burberry repositioning as a luxury brand

Product Life Cycle Limitations

While the PLC is a useful tool, it's important to understand its limitations:

Not all products follow the classic curve shape
The length of each stage varies greatly between products
It's difficult to identify exactly which stage a product is in at a given time
External factors like economic conditions can disrupt the normal cycle
Some products (like basic foods) seem to stay in maturity indefinitely

Despite these limitations, the Product Life Cycle remains one of the most valuable concepts for marketing planning and strategy development.

Quick Review: PLC in Action

Can you identify which stage these products are currently in?

Vinyl records (Reintroduction/Growth after years in Decline)
Tablet computers (Late Maturity)
Smart speakers (Growth)
MP3 players (Decline)
Reusable water bottles (Growth/Early Maturity)
Fax machines (Late Decline/Deletion)

Remember: Different products in the same category can be at different stages. For example, while basic mobile phones are in decline, smartphones are in maturity.

🧠 Test Your Knowledge!